The Consumer Financial Protection Bureau (CFPB) has introduced its Mortgage
Performance Trends tool designed to make tracking nationwide delinquencies
easier. Thus far, the data has shown that we have reached a remarkable
low period for mortgage delinquency rates.
In a recent press release, the CFPB said that the tool indicates that mortgage
delinquencies are at their lowest since the financial crisis, where the
housing market crash forced a rash of nationwide defaults and foreclosures.
The new instrument also shows interactive graphs and charts that provide
the scope of mortgage delinquencies in the country. These innovative tools
provide the viewer with a concise breakdown of how the housing market
fares in various regions across the nation, including at the county and
Two categories are implemented when using the CFPB tool to measure delinquencies.
On the one hand, there is the list of borrowers whose mortgages are between
30 and 89 days past due. The second category of defaults concerns those
who are seriously delinquent, being more than 90-days behind on payments.
Typically, the 90-day late threshold triggers a foreclosure proceeding.
One significant benefit of the instrument is its ability to provide insight
into upcoming trends facing the housing market. Tracking the rate of borrowers
who are seriously behind in payments could serve as an indication of where
the economy is headed.
Whereas a low percentage of defaulted loans could imply a healthy financial
infrastructure, a growing number of delinquencies could be indicative
of a coming housing crisis. Experts should, of course, analyze other aspects
of the economy, such as job growth and overall buying trends, to determine
if there is a possibility of a looming recession. Regardless, the CFPB
tool offers a good starting point in the evaluation process.
If current rates, as tracked by the bureau this year, are any indication
of things to come, then it may be a safe bet to say that the economy is
on track for growth. The CFPB tool traced delinquent rates back to 2008
when the housing market as a whole was underwater. The instrument found
that the number of severe delinquencies in 2017 are at their lowest since
the financial crisis began to unfold. The national rate of 90-day defaults
is at 1.1 percent as of March 2017. By comparison, the ratio was 4.9 percent
in March 2010.
The CFPB tool reveals that states are moving in the right direction regarding
real estate and home loans. In particular, Colorado and Alaska have the
lowest rate of serious delinquencies at an average of 0.5 percent. Mississippi
and New Jersey have the highest numbers with an average of 2.1 percent
of loans currently in default.
Even the highest delinquency rates of severely defaulted loans in the riskiest
states falls well below the overall proportion of seriously past due home
loans seen in 2010. Those borrowers currently behind on their mortgage
payments by less than 90-days totals only about 4.3 percent.
Nevada was drastically affected by the housing market crisis of 2009, with
its severely delinquent rate reaching 10.7 percent. As of March 2017,
the state has an average 1.2 percent of homeowners who are severely past
due. Such numbers show nearly 100 percent improvement in the state.
Florida also saw its severe delinquency rates peak at 9 percent during
the financial crisis. The State now has a rate of only 1.4 percent. Both
California and Arizona had severely delinquent rates well above 7 percent
during the housing market crisis. These states, however, show the most
promise in 2017 with housing prices reaching all-time highs, and delinquencies
falling to below 1 percent.
The new CFPB tracking tool can serve as a useful way for experts as well
as average consumers to investigate local housing market trends in determining
what actions to take. By using the interactive graphs and charts provided
by the instrument, experts can better warn the public about possible upcoming